Summer usually presents a great chance for buyers who might have been less successful during the spring. If sellers weren’t able to sell their homes during the spring, they might have felt like they missed their chance and may have been more open to opportunities to sell to the fewer summer buyers looking for houses.
However, this year’s market is changing this perception: fast-moving sales, back-and-forth negotiations, and bidding wars all characterize today’s tough buying environment. Interest rates are rising slowly but surely, while an already low inventory may shrink more. This spring’s statistics only tell us that the real estate market will only accelerate as 2017 goes on.
No matter what the season, being prepared will help manage your expectations and put you in the best position to close on the home that’s right for you. This is especially the case for first-time buyers, who face fierce competition from their own cohort, as well as older buyers looking to downsize.
Here are five tips if you decide to search for a home this summer.
1. Create a realistic budget and stick to it.
First-time buyers are more likely to break their budget than those with home buying experience. Discuss your budget and how buying a home will fit into your goals with your financial advisor. If you know the reasons why your budget is a certain amount, you’ll be much more hesitant to break it.
One figure you should calculate accurately is a comfortable range for your monthly mortgage payment, taking into account your spending patterns and financial situation. Do the math before you meet with lenders. While a lender will tell you how large a mortgage you can actually be approved for, only you can decide what you’ll be comfortable paying.
2. Getting pre-approved will help.
Hopefully, you’ve gotten your financial documentation prepared by now, since it’s best to shop around for a lender a few months before you plan to buy a home. (Here is a list of the documents you’ll need in order to apply for financing.)
When you find a lender you’re comfortable with, apply for pre-approval so you can make a competitive offer exactly when you need to. Most home buyers get pre-approval before they start their search, and you don’t want to lose valuable time by trying to find out if you can qualify for a mortgage after you find a home you love.
3. Keep renting as an option.
Many homebuyers consider renting instead, particularly if they are first-time buyers. Not only is this a viable option in some markets, but you never know what might happen. If your offer on a home falls through and you’ve already made arrangements for moving out of your previous home, being able to sign a lease quickly will take the pressure off of an already stressful situation.
This type of Plan B will also prevent you from compromising on your standards simply because you are desperate to find a place before, say, the school year begins.
4. Take finding a successful agent seriously.
An experienced agent who can negotiate well and win bidding wars is a great asset in today’s seller’s market. Not many buyers’ first offer will succeed, so find someone who can create the right strategy for you.
(By the way, we have several agents who love to work with first-time homebuyers who might need more guidance and explanation.)
5. A great agent is a great communicator.
If you prefer texting to phone calls, you’ll have unnecessary friction when your agent prefers chatting on the phone. Find an agent who communicates with you the way your prefer. Being comfortable with your agent makes an already stressful experience more bearable.
Regardless of how you communicate, it’s crucial that the “lines” are open, and you can reach your agent and vice versa. Time is a factor in today’s fast-moving market, and it would be a shame to miss out on a property you love because you weren’t one of the first few bids.
How do you begin?
With few homes for sale and rising prices in most markets, it might not seem like a great time to jump into the home buying process. However, the market will only become more competitive, so it’s best to devote time to preparation and make your move soon.
And there’s no need to do it alone. Having a great agent by your side will increase your chances of success. Whether you’re a first time buyer or buying your third house, talk to one of our agents today, about our most recent listings.
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